Representatives of El Paso Children's Hospital and University Medical Center will begin meeting in April to modify the terms of the hospital's $59 million debt, UMC officials said Friday.

UMC spokeswoman Margaret Althoff-Olivas said the 2-year-old hospital's debt is due in September.

Both UMC and the hospital provided some details in separate statements.

El Paso taxpayers approved a $120 million bond issue in 2007 to build and equip a separately licensed children's hospital. The 122-bed facility, which is about 60 percent occupied, shares space with UMC and opened Feb. 14, 2012.

"We know that their board and administrative team are working hard to develop a restructuring plan that will put them on more solid financial footing so that they can continue to grow," University Medical Center officials said in a statement.

Lawrence G. Duncan, CEO of El Paso Children's Hospital, responded to questions in a statement released by the hospital.

"EPCH's contract with UMC has language requiring both parties to review and assess the contractual relationships if there are any changes in government healthcare reimbursement," the hospital's statement said. "El Paso Children's was never meant to be a profit center for UMC."

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The statement also said, "There is currently a delay in Medicaid waiver payments which also causes a cash flow drop from what was previously anticipated. At this time it is too early to tell but state reimbursement is likely to be somewhat lower."

Under the plan for the children's hospital, the statement said, the El Paso County Hospital District had agreed "to bond and build the building, and provide the initial dollars for recruitment, program development and cash flow until El Paso Children's billings produced cash flow."

The statement said they had agreed that the new hospital would take on all of UMC's pediatric business.

"El Paso Children's (already) has repaid UMC over $33 million dollars towards start-up, lease and contracted services," the statement said. "Some of the pediatric service lines were profitable and some were not."

The children's hospital is a not-for-profit hospital that does not receive taxpayer funds, officials said. It has its own CEO, executive management team and board of directors.

Last month, children's hospital officials said it eliminated seven nonclinical administrative positions and consolidated the vice president of operations and chief nursing officer positions. It also lost the chief financial officer, who resigned.

Regarding the personnel changes, children's hospital officials said Friday that "as a brand new children's hospital, it is our responsibility to operate and manage the hospital with the utmost efficiency while providing high quality cost effective pediatric health care to the children of our region. El Paso Children's Hospital will from time to time hire and discharge employees to meet its business and health objectives."

The hospital statement said that in the two years since it opened, it has almost quadrupled the number of pediatric specialists and established a number of pediatric services previously not available.

Althoff-Olivas said several factors apparently worked against the hospital and led to its current financial problems — the 2008 recession, federal changes in reimbursement mechanisms for children's hospitals and changes in the state's Medicaid waiver program.

"Volumes at El Paso Children's Hospital have increased impressively over the last 24 months," according to UMC's statement. "Outpatient, surgery and emergency visits continue to rise as do admissions to the hospital. Those are all positive achievements. But there have been bumps along the road as well."

El Paso County Judge Veronica Escobar said she is confident that UMC and the children's hospital will solve the problems.

"I always thought that there would be huge bumps along the way for the new hospital," Escobar said. "But the challenges are not insurmountable. The children's hospital board has a lot of work ahead, and the joint committee is a great way to approach this."

Escobar said El Paso needs the children's hospital.

"The community has gained so much from it already. We have physicians and services that we never had before," she said

She said that whatever decisions are made should focus on the long term and are not be based on short-term gains.

Althoff-Olivas said the details have not been worked out on who will serve on the joint special committee and whether the meetings will be open to the public.